Hostname: page-component-78c5997874-lj6df Total loading time: 0 Render date: 2024-11-05T22:38:21.144Z Has data issue: false hasContentIssue false

On the limits of markets

Published online by Cambridge University Press:  04 August 2020

Geoffrey M. Hodgson*
Affiliation:
Institute for International Management, Loughborough University London, London, UK
*
*Corresponding author. Email: [email protected]

Abstract

This is a review essay of Markets without Limits by Jason Brennan and Peter M. Jaworski and of The Invisible Hand? by Bas van Bavel. From different perspectives, both books focus on the moral or practical limits to markets in modern society. While both works make major contributions, there are theoretical flaws. Brennan and Jarworski powerfully countered some criticisms of commodification. But they downplayed the possibility that the transition from gift to contract or market exchange may raise moral issues that are additional to those intrinsic to the goods or services being traded. Van Bavel investigated cycles of growth, inequality and decline in several market economies over the last 1,500 years. But his argument is built on a confusion between finance and capital goods. Nevertheless, much that is positive remains in both books after their flaws are corrected.

Type
Review Essay
Copyright
Copyright © Millennium Economics Ltd 2020

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Acemoglu, D. and Robinson, J. A. (2012), Why Nations Fail: The Origins of Power, Prosperity, and Poverty, New York: Random House and London: Profile.Google Scholar
Acemoglu, D, Johnson, S. and Robinson, J. A. (2005), ‘Institutions as a Fundamental Cause of Long-Run Growth’, in Aghion, P. and Durlauf, S. N. (eds.), Handbook of Economic Growth: Volume 1A, North Holland: Elsevier, pp. 385472.CrossRefGoogle Scholar
Alchian, A. A. (1977), ‘Some Implications of Recognition of Property Right Transaction Costs’, in Brunner, K. (ed.), Economics and Social Institutions: Insights From the Conferences on Analysis and Ideology, Boston, MA: Martinus Nijhoff, pp. 234255.Google Scholar
Allen, R. C. (1992), Enclosure and the Yeoman, Oxford: Clarendon Press.CrossRefGoogle Scholar
Anderson, E. (1990), ‘Is Women's Labour a Commodity?’, Philosophy and Public Affairs, 19(1): 7192.Google ScholarPubMed
Anderson, E. (1993), Value in Ethics and Economics, Cambridge, MA: Harvard University Press.Google Scholar
Arrow, K. J. (1974), The Limits of Organization, New York: Norton.Google Scholar
Arruñada, B. (2017), ‘Property as Sequential Exchange: The Forgotten Limits of Private Contract’, Journal of Institutional Economics 13(4): 753783.CrossRefGoogle Scholar
Barzel, Y. (1989), Economic Analysis of Property Rights, Cambridge: Cambridge University Press.Google Scholar
Berman, H. J. (1983), Law and Revolution: The Formation of the Western Legal Tradition, Cambridge, MA: Harvard University Press.Google Scholar
Berman, H. J. (2003), Law and Revolution II: The Impact of the Protestant Reformations on the Western Legal Tradition, Cambridge, MA: Harvard University Press.CrossRefGoogle Scholar
Besley, T. (2013), ‘What is the Good of the Market? An Essay on Michael Sandel's What Money Can't Buy, Journal of Economic Literature, 51(2): 478495.CrossRefGoogle Scholar
Bloch, M. (1989), ‘The Symbolism of Money in Imerina’, in Jonathan, P. and M. Bloch, (eds.), Money and the Morality of Exchange, Cambridge: Cambridge University Press, pp. 165190.CrossRefGoogle Scholar
Bogart, D. and Richardson, G., (2011), ‘Property Rights and Parliament in Industrializing Britain’, Journal of Law and Economics, 54(2): 241274.CrossRefGoogle Scholar
Boghosian, B. M. (2019), ‘Is Inequality Inevitable? Wealth Naturally Trickles up in Free-Market Economies, Model Suggests’, Scientific American, 1 November 2019.Google Scholar
Boulding, K. E. (1966), ‘The Economics of Knowledge and the Knowledge of Economics’, American Economic Review (Papers and Proceedings), 56(1): 113.Google Scholar
Bowles, S. (2016), The Moral Economy: Why Good Incentives are No Substitute for Good Citizens, New Haven: Yale University Press.Google Scholar
Braun, E. (2015), ‘Carl Menger's Contribution to Capital Theory’, History of Economic Ideas, 23(1): 7799.Google Scholar
Braun, E. (2017), ‘The Theory of Capital as a Theory of Capitalism’, Journal of Institutional Economics, 13(2): 305325.CrossRefGoogle Scholar
Braun, E. (2020), ‘Carl Menger (1840–1921): Contribution to the Theory of Capital (1888), Section V’, Journal of Institutional Economics, 16(4): 557568.CrossRefGoogle Scholar
Brennan, J. (2017), Against Democracy, Paperback Edition, Princeton: Princeton University Press.CrossRefGoogle Scholar
Brennan, J. and Jaworski, P. M. (2016), Markets without Limits: Moral Virtues and Commercial Interests, London and New York: Routledge.Google Scholar
Calabresi, G. and Melamed, A. D. (1989), ‘Property Rules, Liability Rules, and Inalienability: One View of the Cathedral’, Harvard Law Review, 85: 10891128.CrossRefGoogle Scholar
Cannadine, D. (1977), ‘Aristocratic Indebtedness in the Nineteenth Century: The Case Re-opened’, Economic History Review New Series, 30(4): 624650.Google Scholar
Cannadine, D. (1980), ‘Aristocratic Indebtedness in the Nineteenth Century: A Restatement’, Economic History Review, New Series, 33(4): 569573.CrossRefGoogle Scholar
Cannan, E. (1921), ‘Early History of the Term Capital’, Quarterly Journal of Economics, 35(3): 469481.CrossRefGoogle Scholar
Carruthers, B. G. and Ariovich, L. (2010), Money and Credit: A Sociological Approach, Cambridge: Polity Press.Google Scholar
Clark, J. M. (1957), Economic Institutions and Human Welfare, New York: Alfred Knopf.Google Scholar
Cohen, L. R. (1989), ‘Increasing the Supply of Transplant Organs: The Virtues of a Futures Market’, George Washington Law Review, 58(1): 151.Google ScholarPubMed
Cole, D. H. and Grossman, P. Z., (2002), ‘The Meaning of Property Rights: Law versus Economics?’, Land Economics, 78(3): 317330.CrossRefGoogle Scholar
Commons, J. R. (1934), Institutional Economics – Its Place in Political Economy, New York: Macmillan.Google Scholar
Dale, G. (2010), Karl Polanyi: The Limits to the Market, Cambridge: Polity Press.Google Scholar
Davies, G. (1994), A History of Money: From Ancient Times to the Present Day, Cardiff: University of Wales Press.Google Scholar
De Soto, H. (2000), The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, New York: Basic Books.Google Scholar
Durkheim, É. (1984), The Division of Labour in Society, Translated from the French Edition of 1893, London: Macmillan.Google Scholar
Elder-Vass, D. (2020), ‘Defining the Gift’, Journal of Institutional Economics, 16(5): 675685.CrossRefGoogle Scholar
Fetter, F. A. (1927), ‘Clark's Reformulation of the Capital Concept’, in Hollander, J. H. (ed.), Economic Essays Contributed in Honor of John Bates Clark, New York: Macmillan, pp. 136156.Google Scholar
Fetter, F. A. (1930), ‘Capital’, in Seligman, E. R. A. and Johnson, A. (eds.), Encyclopaedia of the Social Sciences, (Vol. 3), New York: Macmillan, pp. 187190. Reprinted in the Journal of Institutional Economics, 4(1), April 2008, pp.127–137.Google Scholar
Frey, B. S. (1992), ‘Tertium Datur: Pricing, Regulating and Intrinsic Motivation’, Kyklos, 45(2): 161184.CrossRefGoogle Scholar
Frey, B. S. (1994), ‘How Intrinsic Motivation Is Crowded in and out’, Rationality and Society, 6: 334352.CrossRefGoogle Scholar
Frey, B. S. (1997), Not Just for Money: An Economic Theory of Personal Motivation, Aldershot: Edward Elgar.Google Scholar
Frey, B. S. and Jegen, R., (2001), ‘Motivation Crowding Theory’, Journal of Economic Surveys, 15(5): 589623.CrossRefGoogle Scholar
Frey, B. S. and Oberholzer-Gee, F. (1997), ‘The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-out’, American Economic Review, 87(4): 746755.Google Scholar
Frey, B. S., Oberholzer-Gee, F. and Eichenberger, R., (1996), ‘The Old Lady Visits your Backyard: A Tale of Morals and Markets’, Journal of Political Economy, 104(6): 12971313.CrossRefGoogle Scholar
Fukuyama, F. (2011), The Origins of Political Order: From Prehuman Times to the French Revolution, London and New York: Profile Books and Farrar, Straus and Giroux.Google Scholar
Gneezy, U. and Rustichini, A. (2000a), ‘A Fine is a Price’, Journal of Legal Studies, 29(1): 117.CrossRefGoogle Scholar
Gneezy, U. and Rustichini, A. (2000b), ‘Pay Enough or Don't Pay at All’, Quarterly Journal of Economics, 115(3): 791810.CrossRefGoogle Scholar
Graeber, D. (2011), Debt: The First 5,000 Years, New York: Melville House.Google Scholar
Hansmann, H. (1989), ‘The Economics and Ethics of Markets for Human Organs’, Journal of Health Politics, Policy and Law, 14(1): 5785.CrossRefGoogle ScholarPubMed
Hayek, F. A. (1948), Individualism and Economic Order, London and Chicago: George Routledge and University of Chicago Press.Google Scholar
Heinsohn, G. and Steiger, O. (2013), Ownership Economics: On the Foundations of Interest, Money, Markets, Business Cycles and Economic Development, translated and edited by Frank Decker, London and New York: Routledge.CrossRefGoogle Scholar
Hobson, J. A. (1926), The Evolution of Modern Capitalism: A Study of Machine Production (revised edn.), London: Walter Scott, New York: Charles Scribner's.Google Scholar
Hodgson, G. M. (2014), ‘What is Capital? Economists and Sociologists have Changed its Meaning – Should it be Changed Back?’, Cambridge Journal of Economics, 38(5): 10631086.CrossRefGoogle Scholar
Hodgson, G. M. (2015a), Conceptualizing Capitalism: Institutions, Evolution, Future, Chicago: University of Chicago Press.CrossRefGoogle Scholar
Hodgson, G. M. (2015b), ‘Much of the “Economics of Property Rights” Devalues Property and Legal Rights’, Journal of Institutional Economics, 11(4): 683709.CrossRefGoogle Scholar
Hodgson, G. M. (2017a), ‘1688 and All That: Property Rights, the Glorious Revolution and the Rise of British Capitalism’, Journal of Institutional Economics, 13(1): 79107.CrossRefGoogle Scholar
Hodgson, G. M. (2017b), ‘Karl Polanyi on Economy and Society: A Critical Analysis of Core Concepts’, Review of Social Economy, 75(1): 125.CrossRefGoogle Scholar
Hodgson, G. M. (2018), Wrong Turnings: How the Left Got Lost, Chicago: University of Chicago Press.Google Scholar
Hodgson, G. M. (2019a), ‘Taxonomic Definitions in Social Science, with Firms, Markets and Institutions as Case Studies’, Journal of Institutional Economics 15(2): 207233.CrossRefGoogle Scholar
Hodgson, G. M. (2019b), Is Socialism Feasible? Towards an Alternative Future, Cheltenham, UK and Northampton, MA: Edward Elgar.Google Scholar
Honoré, A. M. (1961), ‘Ownership’, in Guest, A. G. (ed.), Oxford Essays in Jurisprudence, Oxford: Oxford University Press, pp. 107147. Reprinted in the Journal of Institutional Economics, 9(2), June 2013, pp. 227–55.Google Scholar
Hoppit, J. (2011), ‘Compulsion, Compensation and Property Rights in Britain, 1688–1833’, Past and Present, 210(1): 93128.CrossRefGoogle Scholar
Hudik, M. and Fang, E. (2020), ‘Money or In-Kind Gift? Evidence From Red Packets in China’, Journal of Institutional Economics, 16(5): 731746.CrossRefGoogle Scholar
Hudson, Michael and Van De Mieroop, M. (eds) (2002), Debts and Economic Renewal in the Ancient Near East, Baltimore: CDL Press.Google Scholar
Keynes, J. M. (1936), The General Theory of Employment, Interest and Money, London: Macmillan.Google Scholar
Kuran, T. (2010), The Long Divergence: How Islamic Law Held Back the Middle East, Princeton: Princeton University Press.Google Scholar
Lancaster, K. (1966), ‘A New Approach to Consumer Theory’, Journal of Political Economy, 74(2): 132157.CrossRefGoogle Scholar
Lin, J. Y. (2012), Demystifying the Chinese Economy, Cambridge and New York: Cambridge University Press.Google Scholar
Maddison, A. (2001), The World Economy: A Millennial Perspective, Paris: OECD.CrossRefGoogle Scholar
Maddison, A. (2003), The World Economy: Historical Statistics, Paris: OECD.CrossRefGoogle Scholar
Marshall, A. (1920), Principles of Economics: An Introductory Volume (8th edn.), London: Macmillan.Google Scholar
Miles, B. (1997), Paul McCartney: Many Years from Now, New York: Holt.Google Scholar
Mingay, G. E. (1963), English Landed Society in the Eighteenth Century, London and Toronto: Routledge and Kegan Paul, University of Toronto Press.Google Scholar
Minsky, H. P. (1982), Can ‘It’ Happen Again?: Essays in Instability and Finance, Armonk, NY: M.E. Sharpe.Google Scholar
Minsky, H. P. (1986), Stabilizing an Unstable Economy, New Haven: Yale University Press.Google Scholar
Mitchell Innes, A. (1914), ‘The Credit Theory of Money’, Banking Law Journal, 31: 151168.Google Scholar
Mokyr, J. (1990), The Lever of Riches: Technological Creativity and Economic Progress, Oxford: Oxford University Press.Google Scholar
North, D. C. (1981), Structure and Change in Economic History, New York: Norton.Google Scholar
North, D. C. and Weingast, B. R., (1989), ‘Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England’, Journal of Economic History, 49(4): 803832.CrossRefGoogle Scholar
North, D. C., Wallis, J. J. and Weingast, B. R. (2009), Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History, Cambridge and New York: Cambridge University Press.CrossRefGoogle Scholar
Nussbaum, M. C. (1992), ‘Human Functioning and Social Justice: In Defense of Aristotelian Essentialism’, Political Theory, 20(2): 202246.CrossRefGoogle Scholar
Ogilvie, S. and Carus, A. W. (2014), ‘Institutions and Economic Growth in Historical Perspective’, in Aghion, P. and Durlauf, S. (eds.), Handbook of Economic Growth (Vol. 2A), Amsterdam: Elsevier, pp. 403513.Google Scholar
Olson, M Jr. (1982), The Rise and Decline of Nations: Economic Growth, Stagflation and Social Rigidities, New Haven: Yale University Press.Google Scholar
O'Neill, J. (1998), The Market: Ethics, Knowledge and Politics, London and New York: Routledge.CrossRefGoogle Scholar
Ostrom, E. (2000), ‘Crowding out Citizenship’, Scandinavian Political Studies, 23(1): 316.CrossRefGoogle Scholar
Peacock, M. S. (2006), ‘The Origins of Money in Ancient Greece: The Political Economy of Coinage and Exchange’, Cambridge Journal of Economics, 30(4): 637650.CrossRefGoogle Scholar
Piketty, T. (2014), Capital in the Twenty-First Century, Cambridge, MA: Belknap Press.CrossRefGoogle ScholarPubMed
Pistor, K. (2019), The Code of Capital: How the Law Creates Wealth and Inequality, Princeton: Princeton University Press.Google Scholar
Polanyi, K. (1944), The Great Transformation: The Political and Economic Origins of Our Time, New York: Rinehart.Google Scholar
Radin, M. J. (1996), Contested Commodities: Trouble with Trade in Sex, Children, Body Parts and Other Things, Cambridge, MA: Harvard University Press.Google Scholar
Robbins, L. (1932), An Essay on the Nature and Significance of Economic Science, London: Macmillan.Google Scholar
Robertson, D. H. (1956), ‘What Does the Economist Economize?’, in Robertson, D. H. (ed.), Economic Commentaries, London: Staples Press, pp. 147155.Google Scholar
Roth, A. E. (2007), ‘Repugnance as a Constraint on Markets’, Journal of Economic Perspectives, 21(3): 3758.CrossRefGoogle Scholar
Sandel, M. J. (2010), Justice: What is the Right Thing to do? London and New York: Penguin.Google Scholar
Sandel, M. J. (2012), What Money Can't Buy: The Moral Limits of Markets, London: Allen Lane.Google Scholar
Satz, D. (2010), Why Some Things Should not be for Sale: The Moral Limits of Markets, Oxford and New York: Oxford University Press.CrossRefGoogle Scholar
Schumpeter, J. A. (1954), History of Economic Analysis, Oxford and New York: Oxford University Press.Google Scholar
Scott, M. F. (1989), A New View of Economic Growth, Oxford: Clarendon Press.Google Scholar
Smith, A. (1776), An Inquiry into the Nature and Causes of the Wealth of Nations, 2 vols. London: Strahan and Cadell.Google Scholar
Sombart, W. (1902), Der moderne Kapitalismus: Historisch-systematische Darstellung des gesamteuropäischen Wirtschaftslebens von seinen Anfängen bis zur Gegenwart, 1st edn., 2 vols. München und Leipzig: Duncker und Humblot.Google Scholar
Sraffa, P. (1960), Production of Commodities by Means of Commodities: Prelude to a Critique of Economic Theory, Cambridge: Cambridge University Press.Google Scholar
Steiger, O. (2006), ‘Property Economics versus New Institutional Economics’, Journal of Economic Issues, 40(1): 183208.CrossRefGoogle Scholar
Steiger, O. (ed.) (2008), Property Economics: Property Rights, Creditor's Money and the Foundations of the Economy, Marburg: Metropolis.Google Scholar
Sugarman, D. and Warrington, R. (1995), ‘Land Law, Citizenship and the Invention of “Englishness”: The Strange World of the Equity of Redemption’, in John, B. and Staves, S. (eds), Early Modern Conceptions of Property, London and New York: Routledge, pp. 111144.Google Scholar
van Bavel, B. (2016), The Invisible Hand? How Market Economies Have Emerged and Declined Since AD 500, Oxford and New York: Oxford University Press.CrossRefGoogle Scholar
Van Bochove, C., Deneweth, H. and Zuijderduijn, J., (2015), ‘Real Estate and Mortgage Finance in England and the Low Countries, 1300–1800’, Continuity and Change, 30(1): 938.CrossRefGoogle Scholar
Veblen, T. B. (1908), ‘Professor Clark's Economics’, Quarterly Journal of Economics, 22(2): 147195.CrossRefGoogle Scholar
Vollan, B. (2008), ‘Socio-Ecological Explanations for Crowding-out Effects From Economic Field Experiments in Southern Africa’, Ecological Economics, 67(4): 560573.CrossRefGoogle Scholar
Weber, M. (1968), Economy and Society: An Outline of Interpretative Sociology, 2 vols, translated from the German edition of 1921–1922 by G. Roth and C. Wittich. Berkeley: University of California Press.Google Scholar
Wempe, B. and Frooman, J. (2018), ‘Reframing the Moral Limits of Markets Debate: Social Domains, Values, Allocation Methods’, Journal of Business Ethics, 153: 115.CrossRefGoogle ScholarPubMed
Zechenter, E. M. (1997), ‘In the Name of Culture: Cultural Relativism and the Abuse of the Individual’, Journal of Anthropological Research, 53(3): 319347.CrossRefGoogle Scholar
Zelizer, V. A. (1997), The Social Meaning of Money: Pin Money, Paychecks, Poor Relief, and Other Currencies, Princeton, NJ: Princeton University Press.Google Scholar